Three Essays in the Economics of Discrimination

This dissertation explores the causes, consequences, and remedies of wage penalties in the labor market. The first chapter explores the relationship between prejudice and wages for gay men in the United States. I show that search models of taste-based discrimination can predict the empirical relationship between prejudice towards gay men and their wages. The second chapter explores how individuals use wage penalties when deciding which college major to select. Using a laboratory experiment, I show that higher female wage penalties in the labor market deter female students from selecting a major. Since female students expect discrimination to be worse in STEM fields, this preference for majors with lower wage penalties leads to a gender participation gap in STEM. My experiment showed that correcting misinformation about wage penalties in the labor market can increase female interest in STEM majors. The final chapter explores how effective public policy has been at reducing the wage penalty against gay men and lesbian women in the United States. I show that the heterogeneous nature of state-level employment non-discrimination laws in the United States has important consequences for their effectiveness. Stronger laws are more effective at reducing the wage penalty for gay men but may lead to lower levels of employment for lesbian women. Weak laws in the United States had no effect on the labor market outcomes of gay men and lesbian women